What is your savings score?
To determine your savings score please answer the following questions. I warn you these questions may be painful!
- Do you have a savings plan for emergencies, for retirement and vacation?
- Do you deposit funds into your savings account monthly?
- Do you have a personal budget?
If you answer no to any of these questions you may be in danger of living above your means.
Actually, there is no such thing as a savings score, but there should be! We all owe it to ourselves to have a secure financial base. Most of us don’t want to think about money issues until we are in a real crisis. Now is the time to organize your financial affairs and map out a plan to save for a new car, buy a home and increase your retirement and vacation savings. Empower yourself with the knowledge and tools to create a financially secure future.
Let’s stop worrying about credit scores and start to focus on savings scores as an indicator that we are handling our money with accountability to our future.
I suggest that a savings score consist of the following indicators:
Having and maintaining a personal budget, credit yourself with 100 points.
Depositing monthly savings into a savings account, 5 points for each deposit (deduct 10 points for each withdrawl). Add 10 points if you deposit 5% or more of your net income.
Maintaining a balance of $100-$550, 10 points.
$551-$750, 20 points
$751-$950, 30 points
$1,200-$1,500, 40 points
Add 5 points for every $500
Depositing monthly savings into a retirement account, 5 points for each deposit (deduct 10 points for each withdrawl). Add 10 points if you deposit 5% or more of your net income.
Maintaining a balance of $5,000-$10,000, 10 points.
$11,000-$20,000, 15 points.
$20,000-$25,000, 20 points.
Add 5 points for every $5,000.
Spending less than 20% of your net income on revolving debt. For example credit cards, 50 points. Less than 15%, 100 points and less than 10%, 200 points.
You should calculate and keep track for your own score. You are in control of your money, cashflow and outflow. You owe it to yourself to get your financial affairs in order.
The Home Repair Resource Center can assist you by providing you with a free one-on-one budget consultation that will pinpoint indicators to strengthen your financial affairs.
Call us at 381-6100 for your free analysis or visit www.hrrc-ch.org.
Gail Jackson is a financial programs counselor at the Home Repair Resource Center. She has worked in the housing counseling field for over 20 years.